Many talk of natural gas as a bridge to the renewable energy future. It isn’t as clean (arguably) as pure renewable such as solar, wind or nuclear, but it provides a cleaner alternative to our primary energy sources of coal and petroleum (for diesel, gasoline, etc.). It is also abundant enough, due to hydraulic fracturing, to make it a viable replacement for much of US domestic demand. At $3.35/mcf at the moment, it is also incredibly inexpensive, freeing up cash for other sectors of our GDP. Natural gas also lacks the significant interruptions of renewable energy sources such as wind (only when the wind blows) or solar (only when the sun shines). The argument goes that since natural gas is abundant, uninterrupted, cheap and cleaner than other fossil fuels, it is the natural bridging energy source until technology sufficiently advances for the economics of renewable technology to make sense without government support.
However, this is not what is happening. In 2012, venture capital investment in renewable technology declined by 34 percent to $5.75 billion, its lowest since 2006. Much of this investment has also shifted away from new generation technologies like wind turbines or solar panels and towards capacity and management technologies such as battery storage and electric grid design. Part of this is due to a maturation in the market. There are a number of large-scale wind and power producers who are right now going through the mergers and acquisition stage of sector development. Investors are letting the shakeout occur before re-engaging wind and solar. However, part of it is due to price. Natural gas prices are less than a third of their $12/mcf post-Katrina prices. Hydraulic fracturing flares large portions of it natural gas as a byproduct of its oil production because it is cheaper to flare than to build the pipelines to get it to market at the moment. Since it’s a byproduct of the $97/barrel oil drilling, natural gas prices are staying low, to the detriment of renewable investment. Renewable technologies are not close to competing at such low prices, so new ventures are slowing down.
Exporting natural gas however, would start creating a global natural gas market. Currently, natural gas is similar to coal in that it mainly serves its domestic market. If it could be thrust into a world market much like petroleum is today, it could help bring positive price pressures to the commodity. This would raise prices, reduce trade imbalances, and provide more profits to the industry while simultaneously making renewables more competitive. Actively supporting globalization of the natural gas market could create an actual bridge to the renewable future.